EX-99.1 2 Ex99-1.htm EX-99.1  

EXHIBIT 99.1

 

hcreit_logo_k_sm

 

FOR IMMEDIATE RELEASE                                                                                                                                     

November 5, 2013

For more information contact:

Scott Estes (419) 247-2800

Jay Morgan (419) 247-2800

 

Health Care REIT Reports 7% Increase in Third Quarter Normalized FFO to a Record $0.97 Per Diluted Share

Closes $1.2 Billion of Third Quarter Investments, Driving Year-To-Date Investments to $5.3 Billion

Same Store NOI Increases 3.7% for Third Quarter, Including 9.4% Increase in Seniors Housing Operating Portfolio

 

Toledo, Ohio, November 5, 2013…..Health Care REIT, Inc. (NYSE:HCN) today announced operating results for the company’s third quarter ended September 30, 2013.

 

“HCN’s outstanding quarter of internal and external growth is a direct result of our high quality portfolio and best in class relationships,” commented George L. Chapman, Chairman and CEO of Health Care REIT, Inc.  “The strong, same store NOI growth was driven in large part by 9.4% growth in our seniors housing operating portfolio.  The year-to-date $5.3 billion of new high quality investments raised our total investments for the last five years to over $20 billion and once again demonstrates the prowess of our team and strength of the business model.”

 

Dividend Growth  As previously announced, the Board of Directors declared a cash dividend for the quarter ended September 30, 2013 of $0.765 per share, as compared to $0.74 per share for the same period in 2012, representing a 3.4% increase.  On November 20, 2013, the company will pay its 170th consecutive quarterly cash dividend.  The Board of Directors also approved a new 2014 quarterly cash dividend rate of $0.795 per share ($3.18 per share annually), which represents a 4% increase, commencing with the February 2014 dividend payment.  The declaration and payment of quarterly dividends remains subject to review by and approval of the Board of Directors.

 

Third Quarter Investment Highlights   

 

Avery United Kingdom (“UK”) Lease   During the quarter, the company completed the previously announced  $212 million (£140 million) sale/leaseback transaction with Avery Healthcare. The acquired portfolio includes 14 seniors housing communities with 940 beds in the UK. The average age of the communities is two years. Avery is one of England’s premier seniors housing operators and most active developers. Rent under the triple-net lease will generate an initial yield of 7% and increase 3% per year over the initial 20-year lease term. Avery has guaranteed the lease. Health Care REIT has an exclusive option to invest in Avery’s future acquisitions and new developments.  The company expects to acquire up to four new seniors housing communities per year upon completion of construction, and will add each community to the master lease. The Avery portfolio investment is consistent with the company’s strategy to own high quality, private pay real estate in attractive markets operated by best in class providers. Including the 14 Avery communities, the company has investments in 45 seniors housing communities located in attractive UK markets with an investment balance of $1.7 billion.

 

Sunrise Completion  As previously announced, the company completed the $745 million final phase of the Sunrise Senior Living property portfolio acquisition on July 1, 2013. The aggregate $4.3 billion investment includes 120 wholly-owned properties and five properties owned in joint ventures with third parties. The company expects the portfolio to generate an unlevered NOI yield exceeding 6.5% in the second half of 2013.

 

Emeritus Lease  In September, the company completed a triple-net lease transaction with Emeritus on a portfolio of 38 high-quality seniors housing communities previously owned in an 80/20 joint venture between Health Care REIT and Merrill Gardens. As part of the transaction, Health Care REIT acquired Merrill Gardens’ 20% equity interest in the joint venture for $173 million, which includes pro rata mortgage debt of $74 million.  Rent is $54 million in year one and increases by the greater of CPI or 4% in year two and the greater of CPI or 3.25% thereafter, with potential for additional rent beginning in year three if gross revenue from the portfolio exceeds certain thresholds.

 

Other Investments  The company completed $95 million of hospital acquisitions at a blended yield of 9.5% and $50 million of medical office building acquisitions at a blended yield of 6.9%.  The company also completed development of two seniors

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3Q13 Earnings Release                                                                                                                                                                November 5, 2013

 

 

 

housing triple-net properties totaling $38 million at a blended initial yield of 8.1%, and one medical office building for $9 million at an initial yield of 8.3%.

 

Dispositions  Year-to-date, the company sold properties generating $412 million in proceeds and $57 million in gains.  The company also generated $66 million in proceeds from loan payoffs. 

 

Capital Activity  During the quarter, $219 million of the company’s 3.0% convertible senior notes due 2029 were converted or redeemed, leaving a principal balance of $275 million.  Also during the quarter, the company issued just over 1,000,000 shares under its dividend reinvestment program, generating $62 million in proceeds.  In October, the company successfully issued $400 million of unsecured notes maturing in January 2024 priced to yield 4.6%, generating $393 million of proceeds. 

 

Sustainability Report  Today the company will issue its first comprehensive sustainability report.  The report will be accompanied by enhancements to our website.  The information to be contained in the report and on our website further enhances our transparency and confirms company management’s commitment to sustainable business practices to the benefit of the company’s stakeholders. 

 

Outlook for 2013  The company is increasing the mid-point of its 2013 FFO and FAD normalized guidance by two cents per diluted share to reflect investments, capital activity and operational results year-to-date.  Normalized FFO has been increased to a range of $3.74 to $3.80 per diluted share (representing a 6%-8% increase) and normalized FAD to a range of $3.29 to $3.35 per diluted share (representing a 6%-8% increase). The company is revising its 2013 net income guidance primarily to reflect the net impact of the October debt issuance, depreciation and amortization adjustments for investment activity, normalizing items and gains/losses on property sales. The company now expects to report net income attributable to common stockholders in a range of $0.29 to $0.35 per diluted share.  The company’s guidance does not include any additional 2013 investments beyond what it has announced, nor any transaction costs, capital transactions, impairments, unanticipated additions to the loan loss reserve or other additional one-time items, including any additional cash payments other than normal monthly rental payments.  Please see the exhibits for a reconciliation of the outlook for net income available to common stockholders to normalized FFO and FAD.  The company will provide additional detail regarding its 2013 outlook and assumptions on the third quarter 2013 conference call.

 

Conference Call Information  The company has scheduled a conference call on Tuesday, November 5, 2013 at 10:00 a.m. Eastern Time to discuss its third quarter 2013 results, industry trends, portfolio performance and outlook for 2013. Telephone access will be available by dialing 888-346-2469 or 706-758-4923 (international).  For those unable to listen to the call live, a taped rebroadcast will be available beginning two hours after completion of the call through November 19, 2013. To access the rebroadcast, dial 855-859-2056 or 404-537-3406 (international).  The conference ID number is 75617641. To participate in the webcast, log on to www.hcreit.com 15 minutes before the call to download the necessary software.  Replays will be available for 90 days.

 

Supplemental Reporting Measures  The company believes that net income attributable to common stockholders (NICS), as defined by U.S. generally accepted accounting principles (U.S. GAAP), is the most appropriate earnings measurement. However, the company considers funds from operations (FFO) and funds available for distribution (FAD) to be useful supplemental measures of its operating performance. Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient. In response, the National Association of Real Estate Investment Trusts (NAREIT) created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO, as defined by NAREIT, means net income, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate and impairments of depreciable assets, plus real estate depreciation and amortization, and after adjustments for unconsolidated entities.   Normalized FFO represents FFO adjusted for certain items detailed in Exhibit 1.  FAD represents FFO excluding net straight-line rental adjustments, amortization related to above/below market leases and amortization of non-cash interest expenses and less cash used to fund capital expenditures, tenant improvements and lease commissions.  Normalized FAD represents FAD excluding prepaid/straight-line rent cash receipts and adjusted for certain items detailed in Exhibit 1.  The company believes that normalized FFO and normalized FAD are useful supplemental measures of operating performance because investors and equity analysts may use these measures to compare the operating performance of the company between periods or as compared to other REITs or other companies on a consistent basis without having to account for differences caused by unanticipated and/or incalculable items.  The company’s supplemental reporting measures and similarly entitled financial measures are widely used by investors and equity analysts in the valuation,

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3Q13 Earnings Release                                                                                                                                                                November 5, 2013

 

 

 

comparison and investment recommendations of companies.  The company’s management uses these financial measures to facilitate internal and external comparisons to historical operating results and in making operating decisions.  Additionally, they are utilized by the Board of Directors to evaluate management.  The supplemental reporting measures do not represent net income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or liquidity.  Finally, the supplemental reporting measures, as defined by the company, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies.  Please see the exhibits for reconciliations of supplemental reporting measures and the supplemental information package for the quarter ended September 30, 2013, which is available on the company’s website (www.hcreit.com), for information and reconciliations of additional supplemental reporting measures.

 

About Health Care REIT, Inc.  Health Care REIT, Inc., an S&P 500 company with headquarters in Toledo, Ohio, is a real estate investment trust that invests across the full spectrum of seniors housing and health care real estate.  The company also provides an extensive array of property management and development services.  As of September 30, 2013, the company’s broadly diversified portfolio consisted of 1,197 properties in 46 states, the United Kingdom, and Canada.  More information is available on the company’s website at www.hcreit.com.

 

Forward-Looking Statements and Risk Factors  This document may contain “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements concern and are based upon, among other things, the possible expansion of the company’s portfolio; the sale of facilities; the performance of its operators/tenants and facilities; its ability to enter into agreements with viable new tenants for vacant space or for facilities that the company takes back from financially troubled tenants, if any; its occupancy rates; its ability to acquire, develop and/or manage facilities; its ability to make distributions to stockholders; its policies and plans regarding investments, financings and other matters; its ability to successfully manage the risks associated with international expansion and operations; its tax status as a real estate investment trust; its critical accounting policies; its ability to appropriately balance the use of debt and equity; its ability to access capital markets or other sources of funds; and its ability to meet its earnings guidance. When the company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The company’s expected results may not be achieved, and actual results may differ materially from expectations. This may be a result of various factors, including, but not limited to: the status of the economy; the status of capital markets, including availability and cost of capital; issues facing the health care industry, including compliance with, and changes to, regulations and payment policies, responding to government investigations and punitive settlements and operators’/tenants’ difficulty in cost-effectively obtaining and maintaining adequate liability and other insurance; changes in financing terms; competition within the health care, seniors housing and life science industries; negative developments in the operating results or financial condition of operators/tenants, including, but not limited to, their ability to pay rent and repay loans; the company’s ability to transition or sell facilities with profitable results; the failure to make new investments as and when anticipated; acts of God affecting the company’s facilities; the company’s ability to re-lease space at similar rates as vacancies occur; the company’s ability to timely reinvest sale proceeds at similar rates to assets sold; operator/tenant or joint venture partner bankruptcies or insolvencies; the cooperation of joint venture partners; government regulations affecting Medicare and Medicaid reimbursement rates and operational requirements; regulatory approval and market acceptance of the products and technologies of life science tenants; liability or contract claims by or against operators/tenants; unanticipated difficulties and/or expenditures relating to future acquisitions; environmental laws affecting the company’s facilities; changes in rules or practices governing the company’s financial reporting; the movement of U.S. and foreign currency exchange rates; and legal and operational matters, including real estate investment trust qualification and key management personnel recruitment and retention. Finally, the company assumes no obligation to update or revise any forward-looking statements or to update the reasons why actual results could differ from those projected in any forward-looking statements.

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3Q13 Earnings Release                                                                                                                                                                November 5, 2013

 

 

 

HEALTH CARE REIT, INC.

Financial Exhibits

Consolidated Balance Sheets (unaudited)

 

(in thousands)

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

2013

 

2012

 

Assets

 

 

 

 

 

 

 

Real estate investments:

 

 

 

 

 

 

 

 

 

Land and land improvements

 

$

 1,869,234 

 

$

 1,268,757 

 

 

 

Buildings and improvements

 

 

 20,387,577 

 

 

 14,766,557 

 

 

 

Acquired lease intangibles

 

 

 1,050,542 

 

 

 572,765 

 

 

 

Real property held for sale, net of accumulated depreciation

 

 

 2,141 

 

 

 153,458 

 

 

 

Construction in progress

 

 

 158,006 

 

 

 219,705 

 

 

 

 

 

 

 23,467,500 

 

 

 16,981,242 

 

 

 

Less accumulated depreciation and intangible amortization

 

 

 (2,168,334) 

 

 

 (1,480,293) 

 

 

 

 

Net real property owned

 

 

 21,299,166 

 

 

 15,500,949 

 

 

 

Real estate loans receivable(1)

 

 

 307,377 

 

 

 284,908 

 

 

 

Net real estate investments

 

 

 21,606,543 

 

 

 15,785,857 

 

Other assets:

 

 

 

 

 

 

 

 

 

Investments in unconsolidated entities

 

 

 475,574 

 

 

 456,552 

 

 

 

Goodwill

 

 

 68,321 

 

 

 68,321 

 

 

 

Deferred loan expenses

 

 

 68,569 

 

 

 57,539 

 

 

 

Cash and cash equivalents

 

 

 164,838 

 

 

 1,382,252 

 

 

 

Restricted cash

 

 

 80,890 

 

 

 140,404 

 

 

 

Receivables and other assets(2)

 

 

 585,070 

 

 

 391,350 

 

 

 

 

 

 

 1,443,262 

 

 

 2,496,418 

 

Total assets

 

$

 23,049,805 

 

$

 18,282,275 

 

 

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

Borrowings under unsecured lines of credit arrangements

 

$

 847,670 

 

$

 0 

 

 

 

Senior unsecured notes

 

 

 6,395,638 

 

 

 4,921,712 

 

 

 

Secured debt

 

 

 3,115,862 

 

 

 2,314,717 

 

 

 

Capital lease obligations

 

 

 84,069 

 

 

 82,596 

 

 

 

Accrued expenses and other liabilities

 

 

 660,441 

 

 

 405,798 

 

Total liabilities

 

 

 11,103,680 

 

 

 7,724,823 

 

Redeemable noncontrolling interests

 

 

 31,706 

 

 

 35,047 

 

Equity:

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

 1,022,917 

 

 

 1,022,917 

 

 

 

Common stock

 

 

 288,249 

 

 

 259,522 

 

 

 

Capital in excess of par value

 

 

 12,349,678 

 

 

 10,502,057 

 

 

 

Treasury stock

 

 

 (21,263) 

 

 

 (17,531) 

 

 

 

Cumulative net income

 

 

 2,301,869 

 

 

 2,077,641 

 

 

 

Cumulative dividends

 

 

 (4,363,376) 

 

 

 (3,485,592) 

 

 

 

Accumulated other comprehensive income

 

 

 (23,475) 

 

 

 (10,432) 

 

 

 

Other equity

 

 

 5,864 

 

 

 7,445 

 

 

 

 

Total Health Care REIT, Inc. stockholders’ equity

 

 

 11,560,463 

 

 

 10,356,027 

 

 

 

Noncontrolling interests

 

 

 353,956 

 

 

 166,378 

 

Total equity

 

 

 11,914,419 

 

 

 10,522,405 

 

Total liabilities and equity

 

$

 23,049,805 

 

$

 18,282,275 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes non-accrual loan balances of $2,650,000 and $13,035,000 at September 30, 2013 and 2012, respectively.

(2) Includes net straight-line receivable balances of $186,872,000 and $155,495,000 at September 30, 2013 and 2012, respectively.

  

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3Q13 Earnings Release                                                                                                                                                                November 5, 2013

 

 

 

 

Consolidated Statements of Income (unaudited)

(in thousands, except per share data)

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

 

 

September 30,

 

September 30,

 

 

 

 

 

2013

 

2012

 

2013

 

2012

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

 311,731 

 

$

 277,919 

 

$

 909,659 

 

$

 789,748 

 

 

Resident fees and service

 

 

 466,127 

 

 

 174,464 

 

 

 1,164,446 

 

 

 498,295 

 

 

Interest income

 

 

 7,629 

 

 

 8,111 

 

 

 24,325 

 

 

 24,131 

 

 

Other income

 

 

 1,443 

 

 

 1,339 

 

 

 3,168 

 

 

 4,505 

Gross revenues

 

 

 786,930 

 

 

 461,833 

 

 

 2,101,598 

 

 

 1,316,679 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 116,530 

 

 

 91,915 

 

 

 336,585 

 

 

 271,223 

 

 

Property operating expenses

 

 

 342,730 

 

 

 144,417 

 

 

 874,960 

 

 

 409,236 

 

 

Depreciation and amortization

 

 

 242,668 

 

 

 127,844 

 

 

 628,700 

 

 

 373,344 

 

 

General and administrative expenses

 

 

 28,718 

 

 

 23,679 

 

 

 79,799 

 

 

 77,302 

 

 

Transaction costs

 

 

 23,591 

 

 

 8,264 

 

 

 117,707 

 

 

 42,535 

 

 

Loss (gain) on derivatives, net

 

 

 4,872 

 

 

 409 

 

 

 4,465 

 

 

 (1,712) 

 

 

Loss (gain) on extinguishment of debt, net

 

 

 (4,068) 

 

 

 215 

 

 

 (4,376) 

 

 

 791 

 

 

Provision for loan losses

 

 

 0 

 

 

 27,008 

 

 

 0 

 

 

 27,008 

Total expenses

 

 

 755,041 

 

 

 423,751 

 

 

 2,037,840 

 

 

 1,199,727 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

and income from unconsolidated entities

 

 

 31,889 

 

 

 38,082 

 

 

 63,758 

 

 

 116,952 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax (expense) benefit

 

 

 (3,077) 

 

 

 (836) 

 

 

 (7,055) 

 

 

 (3,754) 

Income (loss) from unconsolidated entities

 

 

 (331) 

 

 

 (739) 

 

 

 (3,529) 

 

 

 2,250 

Income (loss) from continuing operations

 

 

 28,481 

 

 

 36,507 

 

 

 53,174 

 

 

 115,448 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on sales of properties, net

 

 

 4,707 

 

 

 12,827 

 

 

 57,202 

 

 

 46,046 

 

 

Impairment of assets

 

 

 0 

 

 

 (6,952) 

 

 

 0 

 

 

 (6,952) 

 

 

Income (loss) from discontinued operations, net

 

 

 417 

 

 

 11,124 

 

 

 2,212 

 

 

 33,294 

 

 

 

 

 

 

 5,124 

 

 

 16,999 

 

 

 59,414 

 

 

 72,388 

Net income (loss)

 

 

 33,605 

 

 

 53,506 

 

 

 112,588 

 

 

 187,836 

Less:

Preferred dividends

 

 

 16,602 

 

 

 16,602 

 

 

 49,805 

 

 

 52,527 

 

 

 

Preferred stock redemption charge

 

 

 0 

 

 

 0 

 

 

 0 

 

 

 6,242 

 

 

 

Net income (loss) attributable to noncontrolling interests

 

 

 (3,688) 

 

 

 (365) 

 

 

 (4,462) 

 

 

 (2,241) 

Net income (loss) attributable to common stockholders

 

$

 20,691 

 

$

 37,269 

 

$

 67,245 

 

$

 131,308 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 286,020 

 

 

 224,391 

 

 

 273,148 

 

 

 212,592 

 

 

Diluted

 

 

 288,029 

 

 

 226,258 

 

 

 275,247 

 

 

 214,075 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to common stockholders per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

 0.07 

 

$

 0.17 

 

$

 0.25 

 

$

 0.62 

 

 

Diluted

 

$

 0.07 

 

$

 0.16 

 

$

 0.24 

 

$

 0.61 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common dividends per share

 

$

 0.765 

 

$

 0.74 

 

$

 2.295 

 

$

 2.22 

  

Page 5 of 7 


 

3Q13 Earnings Release                                                                                                                                                                November 5, 2013

 

 

 

 

 

Normalizing Items

 

 

 

 

 

 

 

 

 

 

Exhibit 1

 

 

(in thousands, except per share data)

Three Months Ended

 

Nine Months Ended

 

 

 

 

 

 

September 30,

 

September 30,

 

 

 

 

 

 

2013

 

2012

 

2013

 

2012

 

 

Transaction costs

$

 23,591(1)

 

$

 8,264 

 

$

 117,707 

 

$

 42,535 

 

 

Special stock compensation grants

 

 0 

 

 

 0 

 

 

 0 

 

 

 4,316 

 

 

Loss (gain) on derivatives, net

 

 4,872(2)

 

 

 409 

 

 

 4,465 

 

 

 (1,712) 

 

 

Loss (gain) on extinguishment of debt, net

 

 (4,068)(3)

 

 

 215 

 

 

 (4,376) 

 

 

 791 

 

 

Provision for loan losses

 

 0 

 

 

 27,008 

 

 

 0 

 

 

 27,008 

 

 

Held for sale hospital operating expenses

 

 0 

 

 

 0 

  

 

 0 

 

 

 215 

 

 

Preferred stock redemption charge

 

 0 

 

 

 0 

 

 

 0 

 

 

 6,242 

 

 

Less: Normalizing items attributable to noncontrolling interests and unconsolidated entities, net

 

 (1,847) 

 

 

 0 

 

 

 (1,858) 

 

 

 0 

 

 

Total

$

 22,548 

 

$

 35,896 

 

$

 115,938 

 

$

 79,395 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average diluted common shares outstanding

 

 288,029 

 

 

 226,258 

 

 

 275,247 

 

 

 214,075 

 

 

Net amount per diluted share

$

 0.08 

 

$

 0.16 

 

$

 0.42 

 

$

 0.37 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes:

(1) Primarily costs incurred with seniors housing acquisitions.

 

 

 

 

 

(2) Related to currency hedges executed to lock the exchange rates on international transactions.

 

 

 

 

 

(3) Related to secured debt extinguishments during the quarter.

 

  

 

Funds Available for Distribution Reconciliation

 

 

 

 

 

 

 

 

 

 

Exhibit 2

 

 

(in thousands, except per share data)

Three Months Ended

 

Nine Months Ended

 

 

 

 

 

 

September 30,

 

September 30,

 

 

 

 

 

 

2013

 

2012

 

2013

 

2012

 

 

Net income (loss) attributable to common stockholders

$

 20,691 

 

$

 37,269 

 

$

 67,245 

 

$

 131,308 

 

 

Depreciation and amortization(1)

 

 242,981 

 

 

 132,858 

 

 

 630,579 

 

 

 393,243 

 

 

Losses/impairments (gains) on properties, net

 

 (4,707) 

 

 

 (5,875) 

 

 

 (57,202) 

 

 

 (39,094) 

 

 

Noncontrolling interests(2)

 

 (10,853) 

 

 

 (4,631) 

 

 

 (22,763) 

 

 

 (13,689) 

 

 

Unconsolidated entities(3)

 

 8,494 

 

 

 8,518 

 

 

 33,763 

 

 

 15,996 

 

 

Gross straight-line rental income

 

 (14,714) 

 

 

 (13,231) 

 

 

 (43,044) 

 

 

 (37,162) 

 

 

Prepaid/straight-line rent receipts

 

 510 

 

 

 1,956 

 

 

 4,951 

 

 

 5,093 

 

 

Amortization related to above (below) market leases, net

 

 54 

 

 

 972 

 

 

 163 

 

 

 767 

 

 

Non-cash interest expense

 

 (852) 

 

 

 2,241 

 

 

 3,779 

 

 

 8,782 

 

 

Cap-ex, tenant improvements, lease commissions

 

 (17,357) 

 

 

 (9,345) 

 

 

 (41,415) 

 

 

 (28,578) 

 

 

Funds available for distribution

 

 224,247 

 

 

 150,732 

 

 

 576,056 

 

 

 436,666 

 

 

Normalizing items, net(4)

 

 22,548 

 

 

 35,896 

 

 

 115,938 

 

 

 79,395 

 

 

Prepaid/straight-line rent receipts

 

 (510) 

 

 

 (1,956) 

 

 

 (4,951) 

 

 

 (5,093) 

 

 

Funds available for distribution - normalized

$

 246,285 

 

$

 184,672 

 

$

 687,043 

 

$

 510,968 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average diluted common shares outstanding

 

 288,029 

 

 

 226,258 

 

 

 275,247 

 

 

 214,075 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to common stockholders

$

 0.07 

 

$

 0.16 

 

$

 0.24 

 

$

 0.61 

 

 

 

Funds available for distribution

$

 0.78 

 

$

 0.67 

 

$

 2.09 

 

$

 2.04 

 

 

 

Funds available for distribution - normalized

$

 0.86 

 

$

 0.82 

 

$

 2.50 

 

$

 2.39 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized FAD Payout Ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per common share

$

 0.765 

 

$

 0.74 

 

$

 2.295 

 

$

 2.22 

 

 

 

FAD per diluted share - normalized

$

 0.86 

 

$

 0.82 

 

$

 2.50 

 

$

 2.39 

 

 

 

 

Normalized FAD payout ratio

 

89%

 

 

90%

 

 

92%

 

 

93%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes:

(1) Depreciation and amortization includes depreciation and amortization from discontinued operations.

 

 

 

 

 

(2) Represents noncontrolling interests' share of net FAD adjustments.

 

 

 

 

 

(3) Represents HCN's share of net FAD adjustments from unconsolidated entities.

 

 

 

 

 

(4) See Exhibit 1.

 

  

Page 6 of 7 


 

3Q13 Earnings Release                                                                                                                                                                November 5, 2013

 

 

 

 

 

Funds From Operations Reconciliation

 

 

 

 

 

 

 

 

 

 

Exhibit 3

 

 

(in thousands, except per share data)

Three Months Ended

 

Nine Months Ended

 

 

 

 

 

 

September 30,

 

September 30,

 

 

 

 

 

 

2013

 

2012

 

2013

 

2012

 

 

Net income (loss) attributable to common stockholders

$

 20,691 

 

$

 37,269 

 

$

 67,245 

 

$

 131,308 

 

 

Depreciation and amortization(1)

 

 242,981 

 

 

 132,858 

 

 

 630,579 

 

 

 393,243 

 

 

Losses/impairments (gains) on properties, net

 

 (4,707) 

 

 

 (5,875) 

 

 

 (57,202) 

 

 

 (39,094) 

 

 

Noncontrolling interests(2)

 

 (12,328) 

 

 

 (5,440) 

 

 

 (25,942) 

 

 

 (15,619) 

 

 

Unconsolidated entities(3)

 

 11,626 

 

 

 11,913 

 

 

 45,130 

 

 

 22,673 

 

 

Funds from operations

 

 258,263 

 

 

 170,725 

 

 

 659,810 

 

 

 492,511 

 

 

Normalizing items, net(4)

 

 22,548 

 

 

 35,896 

 

 

 115,938 

 

 

 79,395 

 

 

Funds from operations - normalized

$

 280,811 

 

$

 206,621 

 

$

 775,748 

 

$

 571,906 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average diluted common shares outstanding

 

 288,029 

 

 

 226,258 

 

 

 275,247 

 

 

 214,075 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to common stockholders

$

 0.07 

 

$

 0.16 

 

$

 0.24 

 

$

 0.61 

 

 

 

Funds from operations

$

 0.90 

 

$

 0.75 

 

$

 2.40 

 

$

 2.30 

 

 

 

Funds from operations - normalized

$

 0.97 

 

$

 0.91 

 

$

 2.82 

 

$

 2.67 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized FFO Payout Ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per common share

$

 0.765 

 

$

 0.74 

 

$

 2.295 

 

$

 2.22 

 

 

 

FFO per diluted share - normalized

$

 0.97 

 

$

 0.91 

 

$

 2.82 

 

$

 2.67 

 

 

 

 

Normalized FFO payout ratio

 

79%

 

 

81%

 

 

81%

 

 

83%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes:

(1) Depreciation and amortization includes depreciation and amortization from discontinued operations.

 

 

 

 

 

(2) Represents noncontrolling interests' share of net FFO adjustments.

 

 

 

 

 

(3) Represents HCN's share of net FFO adjustments from unconsolidated entities.

 

 

 

 

 

(4) See Exhibit 1.

 

  

 

Outlook Reconciliations: Year Ended December 31, 2013

 

 

 

 

 

 

 

Exhibit 4

 

 

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior Outlook

 

Current Outlook

 

 

 

 

 

 

Low

 

High

 

Low

 

High

 

 

FFO Reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

$

 0.58 

 

$

 0.68 

 

$

 0.29 

 

$

 0.35 

 

 

Losses/impairments (gains) on sale of properties, net

 

 (0.19) 

 

 

 (0.19) 

 

 

 (0.21) 

 

 

 (0.21) 

 

 

Depreciation and amortization(1)

 

 2.97 

 

 

 2.97 

 

 

 3.24 

 

 

 3.24 

 

 

Funds from operations

 

 3.36 

 

 

 3.46 

 

 

 3.32 

 

 

 3.38 

 

 

Normalizing items, net(2)

 

 0.34 

 

 

 0.34 

 

 

 0.42 

 

 

 0.42 

 

 

Funds from operations - normalized

$

 3.70 

 

$

 3.80 

 

$

 3.74 

 

$

 3.80 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FAD Reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

$

 0.58 

 

$

 0.68 

 

$

 0.29 

 

$

 0.35 

 

 

Losses/impairments (gains) on sale of properties, net

 

 (0.19) 

 

 

 (0.19) 

 

 

 (0.21) 

 

 

 (0.21) 

 

 

Depreciation and amortization(1)

 

 2.97 

 

 

 2.97 

 

 

 3.24 

 

 

 3.24 

 

 

Net straight-line rent and above/below amortization(1)

 

 (0.18) 

 

 

 (0.18) 

 

 

 (0.19) 

 

 

 (0.19) 

 

 

Cap-ex, tenant improvements, lease commissions(1)

 

 (0.25) 

 

 

 (0.25) 

 

 

 (0.24) 

 

 

 (0.24) 

 

 

Funds available for distribution

 

 2.93 

 

 

 3.03 

 

 

 2.89 

 

 

 2.95 

 

 

Normalizing items, net(2)

 

 0.34 

 

 

 0.34 

 

 

 0.42 

 

 

 0.42 

 

 

Prepaid/straight-line rent receipts

 

 (0.02) 

 

 

 (0.02) 

 

 

 (0.02) 

 

 

 (0.02) 

 

 

Funds available for distribution - normalized

$

 3.25 

 

$

 3.35 

 

$

 3.29 

 

$

 3.35 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes:

(1) Amounts presented net of noncontrolling interests' share and HCN's share of unconsolidated entities.

 

 

  

(2) See Exhibit 1.

 

 

Page 7 of 7